Investors, and Congress, Ignore MedPAC
Since November’s crash, skilled nursing prices continue to rise. We sometimes wonder if the members of the Medicare Payment Advisory Commission, or MedPAC, ever get frustrated that their recommendations often go unheeded by Congress. This is certainly the case with recommendations for skilled nursing Medicare reimbursement. Last week, MedPAC recommended a Medicare rate freeze for SNFs through 2019, which Congress will surely ignore….again. Because Medicaid policy is not part of its charter, the MedPAC commissioners ignore it, even though they are keenly aware that in SNFs, Medicare payments subsidize low Medicaid payments. Medicare payment increases are usually quite small, but that... Read More »
Genesis HealthCare, Kindred and Brookdale Working With REITs
It was not easy, but Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living have worked with their REITs to strengthen all concerned. In reviewing the events of the year, I think perhaps the most important ones involve Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living. And, of course, the REITs with close ties to them. With regard to Genesis, I know it took some brass ones for Welltower to work through their various leases with Genesis and sell a large number of the properties. But the important aspect was the reduction of the rents and the smaller annual escalators that will keep Genesis on an upward track. Investors liked it, boosting the share price by 37%... Read More »
HHS and CMS Appointments
It could be a turbulent year for SNF valuations in 2017. After the election….that one….we thought we might be in for a wild ride with the unpredictable Donald Trump taking over. Healthcare M&A, which had slowed down a bit this year, seemed to be picking up, and interest in our products spiked after the election, which is always a telltale sign. But with yesterday’s announcements of the new heads of HHS and CMS, the ride could get a little wilder. By naming Tom Price to run Health and Human Services, one of the more anti-ObamaCare members of Congress and a physician to boot, you know what is going to happen. And apparently, he has been opposed to the rush to value-based Medicare... Read More »
Being Thankful For What I Do
Happy Thanksgiving to all! So here we are, on Thanksgiving Eve. And what do I have to be thankful for? Besides my family, friends and co-workers, I am very thankful that I made the decision 30 years ago to get involved in the seniors housing and care business. It has been quite the ride, and for those of you who have been around a long time and remember, I am glad I took my last skilled nursing facility listing more than 22 years ago. I never sold it, but Mark Davis of Healthcare Transactions Group took over the sale for us when we exited the brokerage business in the early 1990s, and got the deal done. Since then, I have really enjoyed what I do, writing about what is happening with... Read More »
Cap Rates and Interest Rates
With the recent jump in interest rates, cap rates have no where to go but up. Since the end of September, the 10-year Treasury note has increased by 60 basis points, or 38%, to 2.22% yesterday. More than half of that increase occurred after the results of the presidential election. It seems that Trump’s pro-business reputation is making investors believe that increased infrastructure spending and economic growth will soon be upon us, followed by inflation. It doesn’t usually happen that fast. That said, with the recent jump in rates, it is almost a certainty that the Fed will increase short-term rates within a month. And there is now talk of further rate increases next year. So what does... Read More »Schedule a demo
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